Singapore stocks end higher, Straits Times Index jumps 0.8pc

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SINGAPORE: Singapore stocks closed higher, with sponsors confident by official data that showed Asia’s largest economy extended at a strong clip in 4Q2014.
The Chinese economy grew 7.3% y-o-y in the December quarter, bringing full-year expansion to 7.4%.
“We still expect the People’s Bank of China to cut lending and deposit interest rates and reserve requirement ratios in the first half of this year … to lend further support to business activities, especially in agriculture and SME sectors,” UOB eonomist Suan Teck Kin wrote in a note.
His views gelled with a call by the International Monetary Fund for governments and central banks to continue supporting their economies with monetary stimulus. The IMF downgraded its 2015 growth forecast for the world economy to 3.5% from 3.8%.
The Straits Times Index ended 0.8% higher at 3,334.02.
Some 1.23 billion shares worth $949.7 million changed hands, compared with 1.17 billion shares worth $897.2 million on Monday.
Gainers outnumbered decliners 275 to 147.
SIA Engineering led gains among blue chips, rising 4.1% to $4.30.
At its current price, SIA Engineering’s valuations are “quite expensive”, especially since operating costs and rising competition are still key challenges, according to DBS Vickers.
“While pent-up demand will eventually return and longer-term fundamentals remain intact for the maintenance, repair and overhaul industry, timing of recovery remains uncertain and pressure on margins continues,” said the broking house.
M1 rose 2.5% to $3.71 as investors welcomed its higher 2014 dividend payout.
With net debt at just 0.7 times its 2014 earnings before interest, taxation, depreciation and amortisation, versus management’s gearing target of up to 1.5 times, “we see a strong case for M1 continuing to pay higher than the minimum 80% payout as stated by its dividend policy,” said JPMorgan.
Sarine Technologies put on 3.7% to $2.77 after the diamond cutter said it has streamlined its shareholder structure.
“It should allow the founding shareholders to monetise their investments for retirement and wealth distribution,” said Maybank Kim Eng.
“Many of them are getting on in years and are no longer involved in the business. On a more positive note, it could improve the stock’s trading liquidity.”